I submitted client's 2016/17 Self Assessment Tax Return online and on time on 29.1.18. HMRC online services show TR as being received 29.1.18. So far, so good.
In rough amounts, the 2016/17 Tax Return disclosed an income tax liability of £1,000 and CGT liability of £10,000. Having checked HMRC online services today, client's records are showing a whopping tax overpayment of around £8,500, being the difference between the 2016/17 tax liability paid and the 2016/17 interim instalments (based on the 2015/16 income tax liability).
So what do I do about the £8,500 overpayment sitting on the HMRC SA account. Although the HMRC computer acknowledges receipt of the Tax Return, it has failed to process the 2016/17 income tax and CGT liability.
What obligations do client and I have in respect of drawing HMRC's attention to their failure.
Is the overpayment legally refundable at some point in the future if HMRC continue in their failure to process the 2016/17 Tax Return they are clearly in possession of.
My view is "honesty is the best policy", so do I have a legal obligation to tell HMRC that their computer or other system is not working.
As far as I am concerned, client has done everything correctly they should have legally done.